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A cool-off to $500 before Ethereum (ETH) Price Rally to $700?

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The Ethereum price is trading within a bullish breakout pattern but in range within the last few days.

Following Dec 23 bar reversing gains of Dec 22, the uptrend appears shaky. It is despite the confidence from the Dec 16 bullish breakout.

At the time of writing (Dec 24), the Ethereum price is trading at $577, plunging 14 percent against BTC, and seven percent versus the greenback.

Ethereum (ETH) Price Overview

Overly, market participants are bullish. They not only Ethereum bulls to drive prices above $670 and $700 but to surge to $700 and $1k in the next few weeks.

However, if prices fall below recent support lines as bear unwind gains of Dec 16 with a visible uptick in trading volumes, it could pour cold water on traders’ expectations.

In the immediate term, traders are watching the reaction of prices at $660—on the upper side, and $580 and the middle BB—on the lower side.

Ethereum (ETH) Market Overview

It has been a spectacular year for Ethereum as a smart contracting platform.

Within 12 months, the ETH price is up four-fold versus the greenback.

Stretching back to May, the Ethereum price—even with Bitcoin surging to over $24k and breaking above $20k, has outperformed the digital gold.

Still, ETH prices are down over 50 percent from their all-time high of $1.4k. With their positive correlation with BTC, and analysts projecting bulls to ease past $1k once $750 is cleared, there could be more room for more upside in days ahead.

ETH/USD found tailwinds in DeFi, and in the second half of the year, the smooth transitioning of Eth1 to Eth2 following the launch of Phase 0, Beacon Chain mainnet.

As of Dec 24, over two million ETH coins had been staked. These are worth over $1 billion, highlight the confidence investors have in the dominant smart contracting network.

Pointing at Ethereum’s utility is the spike of the cumulative stable coin value processed that spiked to over $1 trillion in 2020.

A milestone, this metric alone hints at how on-demand Ethereum is above being a mere transactional layer like Bitcoin. Most of these volumes are from USDT—the most dominant stablecoin, and USDC.

Ethereum Price Prediction

A cool-off to $500 before Ethereum (ETH) Price Rally to $700?

The uptrend is now questionable following Dec 23 price free-fall to below Dec 16 and 17 trade range at $580.

From the daily chart, it is clear bears have the upper hand following price action in the last three days.

There could be attempts by buyers in lower timeframes to load the dips as evidenced by Dec 23 bear bar with a long upper wick, however, today’s follow-through could dampen their efforts.

As long as prices trend lower, below $580 and to within the bull flag with increasing trading volumes, prices could sink to $500—the main support zone in a retest.

Aggressive traders can sell the highs as long as prices are below the Dec 16 lows of $580 as they aim for $500.

Conversely, an unexpected reversal from spot rates to within Dec 16 and 17 trade range will rejuvenate buyers from a volume analysis perspective.

Still, a break above $660—or Dec 2020 highs could lift the ETH/USD price back to $700—or higher.

Chart Courtesy of Trading View

Disclaimer: Opinions are those of the author, and are not financial advice. Do your research.

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